Marsham Street's top official has insisted councils can manage with their current budgets but refused to guarantee they would all balance their books next year.
Grilled by MPs last week, permanent secretary at the Department for Communities and Local Government (DCLG), Melanie Dawes, insisted she was not ‘complacent' but rejected warnings by chief executive of the Chartered Institute of Public Finance and Accountancy (CIPFA), Rob Whiteman.
Mr Whiteman has said that some councils are ‘close to the brink' and that ‘insolvency is looming for some'.
Director of local government at CIPFA, Sean Nolan, added: ‘These are difficult financial times for all councils. For some, there are already clear warning signs that they may soon face stark budget positions.
‘Local authorities have been hit hard since the introduction of austerity and this is ongoing for the next few years.'
Ms Dawes said she had a ‘great deal of respect' for ‘very experienced' Mr Whiteman but went on: ‘I do not share quite the level of concern that he has expressed.
‘It is certainly the case that there are real concerns about the pressures on social care. Our experience so far is that councils are finding they can manage with these budgets. They are proving very creative and innovative about new ways of generating income and providing services.
‘There is no question there is pressure on the system. Local authorities have experienced some really challenging reductions overall in their budgets. They have a lot to teach the rest of the public sector in terms of how to go about finding efficiencies and being more imaginative about how to commission services.'
DCLG has said it does not ‘directly assess' the capacity of councils, though it does ‘monitor risk and, where relevant, service delivery and outcomes'.
Ms Dawes continued: ‘We keep a very close eye on the overall risk across the system and this is something that I have invested in significantly since I arrived at the department a few years ago as accounting officer. I believe we now have a good way of making sure we understand what the risks and pressures are.'
